Debates of Feb. 17th, 1998

Canadian Wheat Board Act

[Chris Axworthy, NDP, Saskatoon—Rosetown—Biggar, SK]

Madam Speaker, I should indicate that the NDP has consistently opposed measures introduced by the Liberal government that it deems undesirable to Canadians. There has been no hesitation on our part in criticizing this government on a whole range of questions. An example is the MAI. We remain the only party in this House that is concerned about the MAI.

Reform Party members are a bunch of applauders to the Liberal Party's decision to drive another stake in the heart of Canadian jobs and the Canadian economy.

The NDP position on Bill C-4 is quite clear, as my position is quite clear. I am opposed to the bill introduced by the Liberal government for the reasons I gave in my speech and for the reasons in the speeches of other members from my party. One thing that distinguishes my position from the position of the member for Yorkton—Melville is that I support the Canadian Wheat Board. He does not.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Madam Speaker, I rise on a point of order. I made it abundantly clear in my speech that I support the board, and all the amendments that were introduced were to support it.

[Chris Axworthy, NDP, Saskatoon—Rosetown—Biggar, SK]

Madam Speaker, farmers in the west will know full well the position of the member for Yorkton—Melville.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Madam Speaker, I rise on a question of privilege.

To assist in the conduct of the affairs of the House could I ask members to recite specifically under what standing orders they are rising on a point of order?

We are conducting debate here. It is very important that all members have the opportunity to debate. I feel members are being restricted by the frivolous, nonsensical, useless waste of time in which Reformers continually engage.

If members could simply state the specific standing order under which they are rising on a point of order it would facilitate debate.

[The Acting Speaker (Ms. Thibeault)]

I take note of your comments.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Madam Speaker, I rise on a point of order. If he raises a question of privilege I may comment on it.

What question of privilege did he raise and what particular edition of Beauchesne's is he—-

[The Acting Speaker (Ms. Thibeault)]

It is not privilege at this point.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Madam Speaker, listening to the hon. member in the party to my left, the far left, I could not help but think how badly they feel because they could not control in any way the rural vote in Saskatchewan. The rural vote left them completely, even the hon. member.

This is a sad day for the people of the prairies. Right now the passage of the bill is as much concern to the people of the prairies as what is going on in the supreme court this afternoon. They are fearful of the passage of the bill.

If the bill passes tonight I will have an arm band ready because it will mean the death of many industries in Saskatchewan which I will point out.

The hon. member referred to a project conducted by the wheat board which indicated that the majority of farmers gained more money by selling to the wheat board. What did he expect?

[The Acting Speaker (Ms. Thibeault)]

I am sorry but the time has expired.

[Chris Axworthy, NDP, Saskatoon—Rosetown—Biggar, SK]

Madam Speaker, I fail to see the concern the member voices with the barley plebiscite and with the studies done by renowned, reputed economists that support the wheat board.

Agricultural economists looked at the issue from the perspective of their disciplines. They concluded in peer evaluated reviews and studies time after time that the wheat board was good for farmers. Why does the member not accept that?

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Madam Speaker, I am pleased to speak to Bill C-4. The amendments contained in Bill C-4 are based on nearly three years of extensive consultation and discussion with western Canadian grain farmers to determine what kind of grain marketing organization they wanted.

Western Canadian grain farmers have asked to retain the Canadian Wheat Board, but they also wanted a more democratic, accountable and responsive Canadian Wheat Board, one that was truly in their hands, allowing them to shape the Canadian Wheat Board to meet their needs. That is in fact what the proposed changes in Bill C-4 provide for.

The proposed changes in Bill C-4 would put more power into the hands of producers than they have ever had throughout the 63 year history of the Canadian Wheat Board. The proposed changes would modernize the governance of the Canadian Wheat Board. They would improve its accountability to producers through the creation of a producer elected majority board of directors. The marketing changes proposed to Bill C-4 are enabling. They would give farmers the tools and the power necessary to shape the CWB's marketing structure to fit their present and future needs.

I would like to address some of the questions that have been raised and in so doing clear up some of the misconceptions that have arisen around Bill C-4 and its proposed amendments to the CWB.

Some farmers have asked if they would have more control under the new system of CWB governance. The answer is yes. The 15 member board of directors would be comprised of 10 producer elected directors and 5 federal appointees. In essence, farmer elected directors would enjoy a two to one majority. Directors would have effective control of the strategic direction of the new CWB and would be able to reflect the views and the needs of farmers in all future operational and marketing decisions.

These elected directors would not be subject to dismissal by the minister responsible for the CWB. Only those who elected them would be able to accomplish this through subsequent elections.

Under Bill C-4 all directors would be entitled to complete disclosure of all CWB facts and figures, bar none. They would be able to examine the prices at which grain is sold, the price premiums achieved, all operating costs and whether the CWB is operating effectively.

With their full knowledge of the CWB and its global competition, the directors would be in the best position to assess what information should be made public and what for commercial reasons should remain confidential.

Why is the board of directors not 100 per cent producer elected? Under the proposed legislation, the government would continue to maintain a substantial financial commitment to the Canadian Wheat Board. The government would continue to guarantee the Canadian Wheat Board's initial payments, its borrowings and its credit sales made under the credit grain sales program.

This represents a strong case for the government having a continued role in appointing some of the members of the board of directors. In addition, the CWB has public policy responsibilities. For example, the CWB is charged with issuing all wheat and barley export licences for all of Canada, not just the prairies.

I have heard the question asked about why the Canadian wheat board is not legally obliged to get the best price for farmers' grain. The Canadian wheat board seeks to obtain the best price possible as a matter of policy. However, making this the corporation's legal objective would be difficult.

Because the CWB seeks to obtain the best price for producers jointly through the pool accounts, it would almost always be possible to show after the fact that somewhat higher returns could have been realized for individual producers had a different set of marketing decisions been made. Therefore, to make the CWB legally responsible to achieve the best price for individual farmer's grain would result in countless legal challenges respecting the board's marketing decisions.

Looking to the future, the board of directors would be responsible for ensuring that the sales program is well managed and that the Canadian wheat board operates in the best interests of producers. This would be preferable to taking a legalistic approach.

Why does the Canadian wheat board need to establish a contingency fund? What would this money be used for? A contingency fund would be developed in order for the CWB to make adjustments to initial payments during the crop year on its own responsibility without the delays involved in getting government approval to provide for potential losses in cash trading operations and to provide for an early pool cash out.

The contingency fund would provide the CWB with the ability to adjust initial payments and get money into farmers' hands more quickly. Given the history of adjusted initial payments, the related risk would be minimal and less than the related benefits to farmers. It would be up to the board of directors with its two-thirds producer elected majority to determine if, when and how to create the contingency fund. The opposition asks why the Auditor General of Canada cannot examine the CWB's books.

The Canadian Wheat Board currently retains an independent firm of chartered accountants to audit its operations. Through its pool accounts, the CWB is managing farmers' money and not government appropriations. Therefore it has always made sense that a private sector auditor rather than the auditor general audit the books.

Under Bills C-4 the CWB would cease to be an agent of Her Majesty and a crown corporation and become a mixed enterprise. This reduces even further the justification for involving the office of the auditor general.

Finally, some private sector users of financial reports take comfort in the fact that private sector auditors unlike the OAG are liable under the law for negligence and other professional misconduct.

The proposed changes in Bill C-4 are balanced and fair. The government realizes the changes contained in Bill C-4 cannot hope to satisfy all parties in what would have been a polarized debate among western grain producers. The government feels nonetheless that these proposed changes to the CWB would equip farmers with the tools and the power to shape the CWB as they see fit so the Canadian Wheat Board could meet the needs of farmers both today and in the future.

I want to share my time with my hon. colleague from St. Boniface.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Madam Speaker, the member opposite made some points with regard to the election of the directors. Ten would be elected by farmers and five by producers under Bill C-4.

The member is from Ontario. The Ontario wheat board is completely controlled by farmers. Why would he have a different standard in this regard? That is not my question. It is more of a question I asked previously.

He referred to an export licence. Has he ever seen that export licence? The export licence he is referring to, which the Canadian Wheat Board has the power to veto or whatever, has a blank on it. If you put three words in the blank you cannot export your grain. What are those three words? I am wondering if the hon. member knows. If you put Alberta, Saskatchewan or Manitoba in the blank you have no control over their grain; you do not own it.

The member is from Ontario. If you put Ontario in that blank, there is not even a charge for it and away you go. You own the grain and you can export it.

What does the member think about the form he referred to? Does he think that export licence is a way to maintain equality in this country? Is that fair? How is he representing his constituents when he supports Bill C-4? I know that farmers on the prairies see this as a big government, Ottawa controlled wheat board.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Madam Speaker, I thank my colleague opposite for his question. As I started to make my remarks in this Chamber, one of my hon. friends in the Reform Party—he is a good friend and a fine gentleman—asked whether I had ever handled wheat, whether I had ever been on a wheat farm. I may have combined as much wheat and I am certain more than several Reform Party members. I just thought I would answer that.

The hon. member from Yorkton asked about the board of directors in his question. He compared it to Ontario. There is a difference between the wheat board in Ontario and the wheat board in western Canada.

The Ontario Producers' Marketing Board markets about 900,000 tonnes of wheat a year, mainly in Canada and the United States, while the Canadian Wheat Board markets an average of 25 million tonnes of wheat and barley per year to more than 70 countries. It should be noted that the financial implications of the decision by the Canadian Wheat Board are much larger than those associated with the Ontario wheat board.

The bottom line is that the power has been given to the directors. Ten out of fifteen of these directors will be elected by the producers and two to one is a good majority.

[Jay Hill, Reform, Prince George—Peace River, BC]

Madam Speaker, the hon. member mentioned the export licence and the permitting process in his speech. I do not know who wrote the speech for him. Obviously he did not know anything about it. He did not answer my hon. colleague's question about it.

My question is on a different issue—

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Madam Speaker, on a point of order. I am going to take this opportunity to learn something about how this Chamber works. I am not trying to get extra time. Madam Speaker, you can kindly add the time on.

My colleague who just spoke said I did not answer that question. I want to ask you, Madam Speaker, to look at the record on how many times questions have been asked across the floor and did they always answer those questions? I would be very glad to speak to any part of this bill, but I do not think I want to accept that from—

[The Acting Speaker (Ms. Thibeault)]

Would the hon. member for Prince George—Peace River carry on with his question.

[Jay Hill, Reform, Prince George—Peace River, BC]

Madam Speaker, obviously the hon. member is responding quite defensively with good reason because he did not answer the question. He had no intention of answering the question.

My question, very quickly because I know time is of the essence, the hon. member, as I am, is a member of the Standing Committee on Agriculture and Agri-Foods. He sat in on the very shortened period of time that we had to consider Bill C-4. As a committee member, I would ask him to cite a list of those presenters who appeared before that committee who actually supported Bill C-4 and the inclusion clause.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Madam Speaker, I thank the hon. member for the question because I was very concerned about this.

I wanted to make sure that my colleagues and my friends in western Canada were being represented well and not just by the Reform Party. I went to the minister's office, I went to the records office and I found that more than 100,000 letters have been sent to the producers and only a very few hundred people responded. I have talked to people from the west. Not all people are represented by Reformers. I would like to put the facts on the table.

[Ronald J. Duhamel, Liberal, Secretary of State (Science]

Madam Speaker, I must thank you for this opportunity to speak in favour of Bill C-4, an act to amend the Canadian Wheat Board Act and to make consequential amendments to other Acts.

Bill C-4 is an innovative bill, which will result in fundamental changes to the relationship between western grain producers and their single window marketing body, the Canadian Wheat Board.

This bill, the result of consultations that were both intensive and extensive, will give grain producers unprecedented power. Not only can they direct the activities of the Canadian Wheat Board, but they can also determine the impact of its future role on their lives. Under the scrutiny of the producers it serves, the CWB will be more open, more responsible, and more attuned to the needs of producers where marketing is concerned.

Under Bill C-4, the CWB will be directed, not as it is at present by government-appointed board members, but by a board of directors. At least 10 of the 15 directors will be directly chosen by western producers. Since the government will continue to provide substantial financial assistance to the Canadian Wheat Board, it will appoint four directors, plus the president.

However, since this is a partnership between the government and the western producers, the directors will set the president's salary and will be entitled to evaluate his performance, and recommend his dismissal if necessary. The directors will have complete control over the activities of the Canadian Wheat Board.

They will have access to complete information on the CWB's sales and finances. In addition, the board of directors, two thirds of whom will be elected by farmers, will decide which information should not be made public for reasons of commercial confidentiality.

Bill C-4 will also give the Canadian Wheat Board's board of directors the authority to use new marketing tools. For example, such tools could be used to offer farmers new grain payment methods and to speed up fund transactions.

For instance, the Canadian Wheat Board could do the following: pay cash for wheat and/or barley; rapidly increase initial payments, if necessary, without having to obtain government approval, as is now the case; and allow farmers to be paid for their participation and for pooling before the end of the crop year.

Some people have expressed the concern that cash purchases will undermine the Canadian Wheat Board. It should be remembered, however, that such measures come under the authority of the board of directors, which is controlled by farmers, and that there is thus a safety mechanism.

Under the exclusion and inclusion provisions of Bill C-4, a democratic process gives farmers full authority regarding which products the Canadian Wheat Board decides to market. The exclusion clause would make it possible for any type or category of wheat or barley to be withdrawn in whole or in part from CWB jurisdiction. Any exclusion would have to be supported by the board of directors, and there would have to be guarantees that the grain would not get mixed with grain marketed by the CWB.

If the directors consider the exclusion to be significant, the exemption should also be approved by the producers in a democratic vote.

Under Bill C-4, the board of directors, controlled by the producers, could make use of numerous innovations in the area of marketing which have been looked at by producers in recent years, voluntary pooling in particular.

Inclusion of a grain in the Board's mandate would not be even contemplated without a request in writing from a legitimate body, the entire membership of which are producers of the grain in question.

When the board of directors has examined and approved inclusion of a grain within the mandate of the CWB, the question should also be submitted to the growers in a democratic vote.

As I have already said, Bill C-4 is the outcome of extensive consultations in all parts of western Canada. Although a strong majority of growers came out clearly in favour of the Canadian Wheat Board, they still wish it to be more accessible and more open, as well as more accountable to growers. Bill C-4 complies fully with that wish.

The government is anxious to get the Canadian Wheat Board into the hands of the producers.

For all of these reasons, I am asking all hon. members of this House to support Bill C-4.

[Cliff Breitkreuz, Reform, Yellowhead, AB]

Madam Speaker, I am sure the member from Manitoba who just spoke is familiar with the tremendous diversification in the prairies, and probably right across the country, that has been occurring for the last 20 years or more. The most recent I know of is in Alberta with the production of hay for export, more specifically timothy and alfalfa. There is a tremendous amount of tonnage going to places around the world, across the Pacific to Japan, Taiwan, the Middle East, the United States, Britain and North Africa.

Another one, of course, is canola, which the member would know more about. In the last 20 years or so canola has really bit into the Canadian acreage of what is sown in the spring. It is a major commodity for many producers in western Canada.

Peas and lentils are pulse crops. Tremendous strides have been made in developing these crops as well. Oats is another one. Since oats have been taken off the wheat board, they have been processed and shipped as pony oats right around the world, especially from Alberta.

Once the regulations were gone, beef just went through the ceiling. My home province of Alberta has over 50% of Canada's beef which is exported to the south, whether alive or in boxes it does not matter. There has been a tremendous growth in that particular sector.

Hog products are the same, especially once the marketing boards were gone. There are hog barns going all over the western provinces taking advantage of that particular sector.

We then have wheat. Now these sectors have increased phenomenally over the last number of years. They are not controlled and do not come under the control of the board, and the Canadian Wheat Board especially in terms of the grains. However, what has happened to wheat? This statement is from the wheat board. Its 10-year export forecast for wheat shows a decline in market share.

Let me just read out exactly where the wheat board stands or Canada stands in this particular situation on the increase in wheat exports. The export of wheat from Argentina will increase by 67% over the next 10 years. The export of wheat from Australia shows a 39% increase. The export of wheat from the European Union shows a 25% increase. Where is Canada? Canada is at 15%, lagging behind most of the major wheat exporting countries.

I am wondering how the member can reconcile the crops that are not under the Canadian Wheat Board flourishing while the crops, particularly the wheat, under the Canadian Wheat Board are lagging behind with a dismal record. I would like the member to respond to that.

[Ronald J. Duhamel, Liberal, Saint Boniface, MB]

Madam Speaker, I appreciate my colleague's question. First of all, it is obvious that he has quite considerable knowledge in this area. While listening to him, I found a considerable number of his comments very worthwhile. I would like to answer him as follows.

It is rather interesting because my colleague obviously demonstrates a significant knowledge of that sector, but at the same time he falls into a trap, which is the suggestion that by comparing gross rates in certain sectors in other countries with respect to the same commodity that all of a sudden it is the fault of the Canadian grain commission. It just does not follow.

One of the reasons why we wanted to do this, as I stated before, is because the producers wanted to control, decide and carve out that vision. They wanted to develop new instruments so that they could be creative and increase their sales. However, I do not accept the basic supposition that the statistics that were shared are a result of the Canadian grain commission. It simply does not follow and I think my colleague, upon reflection, will agree that is a correct statement.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Madam Speaker, it is very interesting on this day, which is a sad day, as I mentioned earlier, for western Canada and especially sad for the wheat board itself, that this instrument, this act and this potential that we have to meet the demands of the new western Canada simply is not being addressed. The same old monopoly, the same old act which makes the people of western Canada hewers of wood and drawers of water is still there.

It is a very sad day for the wheat board. There are no fundamental changes. This bill will be passed in its present form which will mean that the wheat board will self-destruct. There is no question about it.

When the wheat board initiated a survey to see how it was doing, it received the answer that it was doing very well. That was on February 5. A former agriculture and economics professor at the University of Manitoba said this: “There is no question that producers will pocket more cash under a dual market system”.

Why do we never listen to economists outside the wheat board?

This same chap went on to say: “There is one world price out there and I don't believe the board fetches a higher price, but I do believe there is a lot of efficiencies associated with the current arrangement”.

Every one of my Reform colleagues, in every speech we have made, has attempted to save the fundamental principles of the wheat board. Hon. members opposite are so devoted to destroying something they will not even listen to one amendment.

It is a sad day for our farmers. Many of our young farmers want to get into private enterprise so they can use the grain products presently under the control of the board. They will not be allowed to develop those businesses on the prairies under the current arrangement.

I will be sharing my time with the hon. member for Yellowhead; however, I would like to make one further comment.

In my constituency we have three big projects going on. I want to mention the largest one. There is a group of farmers who grow the world's best durum. Naturally the best durum makes the best pasta. They are taking thousands upon thousands of dollars from their pockets to conduct a survey with respect to making available a closed co-op. These durum producers are doing that so they will be able to grow their own grain and deliver it to their own plant. But, no, the long arm of the Ottawa wheat board thinks that is a business which should be here in eastern Canada and it will not allow them to do that.

I hope that the people of my constituency will see how this vote goes tonight. If the bill is passed and the wheat board maintains its current legal monopoly, it will have to stand very soon and tell those people “No, you cannot proceed with that because you do not own your grain”. It is an absolute farce. It is a terrible thing to do.

I want these members to tell me and the people of the Souris—Moose Mountain constituency that my farmers cannot go into business for themselves growing their own grain. Let them answer that question. Let them tell the people why, when they want to mill organic grain, the wheat board reaches over and says “No. You can do it. But we want this”. We cannot even have a small mill in Saskatchewan to send the organically grown grain to to be made into flour without the heavy hand of the wheat board.

This is 1998. It is time hon. members opposite said “Let's free the west. Let's let them do what they are doing in eastern Canada. Let them develop their own industries there with the products they grow”.

Shame on this government if it prevents one of the potential industries from being developed in my constituency. If the government does that it will hear from more than just my constituents' representative in this House.

It is a crying shame. It is totally out of date. We should defeat this bill, take it back to the drawing board and make it relevant to 1998.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Madam Speaker, I have made one observation. Many of the members opposite have not answered our questions. A couple of days ago we asked a question with regard to the CEO of the Canadian Wheat Board.

Many people watching probably do not realize that with Bill C-4 the minister has actually retained and increased his power to manage the board. He has left the most important appointment, the appointment of the chief executive officer, in his hands. He has the power to appoint that person. With that power the chief executive officer can make decisions from day to day in the workings of the board that farmers have no control over.

The Canadian Wheat Board is not the biggest problem farmers have. Farmers have huge problems with the transportation system and with the heavy taxation this government imposes upon them. Farmers pay an inordinate amount of tax. It is terrible.

In terms of the transportation problem, the chief executive officer can continue to dictate where the grain will be sent. At the present time in my riding farmers are very concerned that the Canadian Wheat Board has been forcing them to ship their grain through Thunder Bay and through Vancouver. They could save $25 to $30 a tonne by shipping it through Churchill. But they always get the answer from all the people in the wheat board that for one reason or another they cannot ship it through Churchill. If the government is giving control to the farmers, it has refused to answer why the farmers cannot appoint the CEO who would be directly accountable to them.

Does this member have any comments on what I have just said? This is a very critical question which the government has left unanswered. I see no people over there ready to jump up and answer it because I know they cannot. Just like all the other questions we have asked, they cannot answer.

[Rey D. Pagtakhan, Liberal, Winnipeg North—St. Paul, MB]

Madam Speaker, I rise on a point of order. The member has made a statement that is wrong. I point to paragraph 3.1 of the bill where it states that the decision and operation and authority to act on the part of the chief executive officer is subject to the resolution of the board.

[The Acting Speaker (Ms. Thibeault)]

I am afraid this is debate.